New Health Policies Will Expose Many Missourians To Higher Premiums, More Risk

Thanks to government subsidies, many St. Louis-area residents will be able to afford health insurance for the first time, beginning in 2014. But the insurance they’ll be able to buy will offer a limited range of options.

This trend toward less value is happening not only on the new health insurance marketplaces, also known as health exchanges, in Missouri, Illinois and other states, but also on the “open market,” where health policies have traditionally been sold.

Jeff Rousseau, 42, in O’Fallon, Mo., is among those who will — sooner or later — feel the effects on his wallet.

Rousseau receives insurance from the St. Louis company where he works, but his wife and two young children — Laura, 38; Caroline 8; and Grant, 6 — were expensive to keep on his employer’s health plan, so he opted two years ago to purchase coverage for them from Anthem Blue Cross and Blue Shield in Missouri.

When that plan expires, Rousseau said he could pay almost twice as much to cover his family under Anthem’s new narrow network, even though it may not include his wife’s doctor at Mercy Hospital St. Louis.

“I’m kind of in no-man’s land because I can’t get on the exchange,” he said.

Under the Affordable Care Act, insurance carriers cannot deny coverage because of a person’s pre-existing medical conditions. And insuring everyone, including the unhealthy, is costly.

The new health law also mandates that nearly all policies offer free preventive care such as flu shots, mammograms and colonoscopies, which adds to insurance costs.

The new health insurance marketplace — the online exchange run in Missouri by the federal government — offers residents on the Missouri side of the St. Louis area about two dozen individual and family health plans from only two insurers: Maryland-based Coventry Healthcare, and Anthem Blue Cross and Blue Shield in Missouri.

Glitches have prevented most consumers from accessing Missouri’s online exchange. The Post-Dispatch has analyzed some of the plans, based on materials provided by insurers and federal health officials.

Anthem’s rates appear to be higher, and its provider networks are likely to be much more restrictive in terms of consumer choice, according to a federal database of insurance rates and local health insurance brokers.

The least-expensive Coventry plan — available only to adults under age 30 or those who can prove hardship — provides catastrophic coverage only. The premium for a 27-year-old nonsmoker is about $100 a month, according to data disclosed by the U.S. Department of Health and Human Services.

One of the most expensive and comprehensive Anthem plans on the Missouri health exchange is the Gold Direct Access “ccab” plan (Anthem’s plans, which have similar names, are distinguished by specific initials). At first glance, its relatively low co-pays and deductible of $750 makes it one of the most attractive plans offered on the exchange.

For a 27-year-old nonsmoker in the St. Louis area, the monthly premium for this plan is $292, before subsidies, according to the federal database. For a 50-year-old nonsmoker, the monthly premium is $497. A family with two 30-year-old adults and two children would pay a monthly premium of $986, before subsidies.

That Anthem plan, however, appears to have a significant drawback. Local health insurance brokers and consultants say it excludes two major health care systems from its provider network for individual and family policies: St. Louis-based BJC Healthcare and its affiliated physicians, and Chesterfield-based Mercy Health and its doctors.

Anthem’s promotional brochure indicates that purchasers of Anthem’s health plans on the Missouri exchange will be covered by the “Pathway X” network, but it does not specify which hospitals are included in that network.

Steve Martenet, chief executive of Anthem’s St. Louis-based subsidiary, declined to be interviewed. Anthem officials refused repeatedly to discuss or explain the details of their health insurance policies.

In contrast, Coventry is offering a less expensive gold-rated plan on the Missouri exchange with a broader network that includes BJC Healthcare. For a 27-year-old nonsmoker, the monthly premium is $270 before subsidies, according to the federal database.

Both insurers are offering lower-cost, silver- and bronze-rated plans, but those have much higher deductibles. Buyers of Coventry plans can choose between a wide network of providers or a narrow network; the wide network with more hospital and physician choices has higher monthly premiums.

One of Anthem’s cheapest insurance plans on the Missouri exchange is the Bronze Direct Access “caar” plan with a health savings account. The monthly premium for an individual is $180, but that plan has a $6,300 deductible.

For policyholders, high deductibles add significant risk. If someone gets seriously ill, badly injured or simply needs a lot of medical care, that person or family risks potential exposure to sudden, expensive medical bills and out-of-pocket limits that could amount to a substantial portion of their household income.

Bill Hill, president of Visor Benefits, a Des Peres-based health benefits consulting firm, said the policy rates for 2014 both on and off the exchange are “not really affordable.”

“It’s a wonderful deal for those people who have serious ongoing medical conditions, and it’s a terrible deal for the middle class,” he said. “(But) given the restrictions of the law and the risks that (insurance carriers) have to accept, the rates are probably priced too low.”

Ryan Barker, vice president for health policy at the nonprofit Missouri Foundation for Health, expects competition to help drive down rates in the future.

He was disappointed to see only two insurers offering plans on the exchange in each of Missouri’s 10 rating areas.

“It’s not as much competition as we’d like to see,” Barker said. “I think we’ll see more insurance companies jump in once this is more settled.”

The Limits Of Subsidies

Depending on an applicant’s income, subsidies can significantly lower one’s monthly premium. For a 35-year-old single person in St. Louis County who earns $25,000 a year, the subsidy would be up to $1,369 a year on a silver-rated plan, lowering the person’s monthly premium by $114 a month, according to a subsidy calculator developed by Kaiser Family Foundation and available at MoHealthReport.com.

Depending on a person’s age, a single individual could earn as much as $46,000 and still qualify for a subsidy. The income limit is about $62,000 for a couple and about $94,000 for a family of four.

Although potentially helpful, tax subsidies won’t alter the risk of these new health plans.

“My concern is that the out-of-pocket expense is skyrocketing,” said Blair, the health insurance broker. “The risk is going up and the premiums are going up — unless you get the subsidy. And there’s a big contraction in the (provider) networks.”

Insurers are excluding higher-priced providers from some of their networks to reduce the payout for medical bills, he said, and raising premiums and out-of-pocket limits to cover the overall cost of claims. Out-of-pocket expenses are the medical costs, including co-pays for office visits and drugs, that the consumer must pay; once a limit is reached, the insurer will cover the rest.

As a result, the insurance plans certified on Missouri’s federal-run health exchange appear to be significantly more expensive compared to 2013’s policy rates on the open market.

The out-of-pocket limit for an individual with Anthem’s Gold Direct Access “ccab” plan is $6,000, according to an Anthem brochure. For a family, the out-of-pocket limit would be $12,000.

Blair said that an average monthly premium today for a health plan that is roughly equivalent to Anthem’s “ccab” plan is about $180. The 2013 plan has a broad provider network, a $1,000 deductible and an out-of-pocket limit of $1,000.

In other words, consumers will pay about 50 percent more in 2014 for a similar policy on the exchange, except that the provider network will be more narrow. In addition, the consumer will face $5,000 in additional risk in potential out-of-pocket costs.

Under federal law, those out-of-pocket limits cannot exceed $6,350 for an individual and $12,750 for a couple or family — after which, the insurer picks up the remaining costs. Monthly premiums do not count toward the out-of-pocket limits.

Compared to an insurer’s costs, those limits may seem like chump change. An individual who has a high-risk pregnancy may run up more than $50,000 of medical costs but be held responsible for less than 15 percent of those costs.

Still, a person’s total health care budget under a generous plan can — with sickness or injury —mushroom quickly. And because of the high cost of medical care, those who purchase less expensive bronze-rated plans are more likely to forgo all but the most basic preventive care.

A Family Of Four

It appears that Jeff Rousseau, the St. Louis attorney, wouldn’t qualify for a subsidy if he bought insurance on the Missouri health exchange because his employer offers a health plan for his family members that the government views as affordable.

Even if he did buy coverage on the exchange, Rousseau couldn’t find a plan as good as what he’s got now for his wife and kids. Their current plan from Anthem has a monthly premium of $295 with a $3,000 deductible.

The policy is leaner in terms of coverage. It does not include maternity or mental health care, which the federal law will require in 2014. But there are no out-of-pocket expenses after the deductible. And it has a wide, “worry free” network of health providers, including the family’s pediatrician and his wife’s gynecologist.

Blair, the family’s insurance broker, said if Rousseau tries to find similar coverage for his family on the health insurance exchange for 2014, the closest he could find from Anthem would be a $521 monthly premium and $6,000 deductible — plus an additional 10 percent co-insurance of up to $1,200.

That’s $226 more for the monthly premium and double the current deductible, as well as a co-insurance.

While he could elect to forgo his employer’s plan and continue to buy insurance for his wife and kids on the open market, Rousseau won’t get the same value for the dollar in 2014. If he purchases a similar-rated plan that has a broad provider network for his wife and kids from UnitedHealthcare on the open market, the monthly premium would be about $647, Blair said.

Until recently, Rousseau was scrambling to secure new coverage for his wife and kids. But last week, Anthem sent him a letter saying it could extend their current coverage for one more year. Rousseau said he will probably put his family back on his employer’s plan after the extension.

Rousseau said he’s confused why Anthem’s new plans both on and off the exchange are so expensive.

“I’m not sure why I would have to pay more, unless I’m covering other losses they’re paying,” he said.